Benefits of good business habits
Tax can be complicated and it's not the only thing to consider when running a business.
Our small business random enquiry program findings show that most small businesses aim to report accurately, but sometimes make mistakes.
Establishing good habits not only gives you the best chance of success but can also give you peace of mind and free up your time.
When we see businesses operating well, the common theme is getting the basics right.
- Using digital tools and business software can help you streamline processes, spend less time on administration, and concentrate on areas that will improve your cash flow position.
- Keeping good records ensures you have the right information to meet your obligations, avoid mistakes, and better assess the financial health of your business.
- Getting advice from trusted sources, like your tax professional or the ATO website.
- Setting aside GST, pay as you go (PAYG) withholding and super from your cash flow, so you have the funds available when it’s time to lodge and pay.
Practicing good business habits will help you:
- manage your cash flow and meet your tax and super obligations
- accurately report business income in your tax return
- know which expenses you're entitled to claim, and separate your business and private expenses correctly
- lodge and pay your business activity statements (BAS) correctly and on time
- know what you need to record and report for tax incentives your business receives
- understand the tax implications of your business decisions such as taking money out of your business for your own use
- manage your tax and super obligations and prove your claims.
Using digital tools
Using digital tools and business software can increase the efficiency of your business.
Digital tools can help you:
- track and streamline processes
- manage customer data and employee records
- reduce overhead costs
- support business growth
- easily assess your financial position.
While some digital tools have an upfront or ongoing cost, you can generally claim a tax deduction for the cost of digital products used in running your business. You can only claim a deduction for the business portion of your expenses.
You can claim most operating expenses as a tax deduction in the year you incur them. You may also be able to claim an immediate deduction for depreciating assets under the simplified depreciation rules.
Online services
You can manage most of your business reporting and transactions using our online services.
Sole traders can use ATO online services to make payment arrangements and manage activity statements, PAYG instalments and accounts.
Small business owners can use Online services for business to prepare and lodge activity statements, annual reports, manage accounts and update registration details.
The ATO app lets individuals or sole traders to easily view their personal tax and super information in one place. It has a range of features and tools to help you keep on top of your tax and super.
Good record keeping
Keeping accurate and complete records will help you meet your tax, super and employer obligations.
See our free and helpful resources:
- Essentials to strengthen your small business – Record keepingOpens in a new window – a self-paced course on record keeping
- myDeductions – sole traders can use myDeductions, the record-keeping tool in the ATO app that makes it easier to keep records in one place
- Record keeping for business – how to stay on top of your tax, super and employer obligations
- Record keeping evaluation tool – a simple way to see how well you're handling your business records
- Selling or closing your business – records – check what you need to record when you sell or close your business.
Getting advice
Getting the right help makes it easier to navigate change and uncertainty in your business lifecycle, such as:
- Supporting your small business – learning resources, tools and services
- Tax support for businesses and not for profit – how to get help if you can't pay on time.
There are also organisations that provide information and services:
- Australian Small Business and Family Enterprise OmbudsmanOpens in a new window – helps small businesses and family enterprises grow and thrive, and provides the free My Business Health support tool
- Council of Small Business Organisations AustraliaOpens in a new window – represents the interests of small business
- Registered tax or BAS agentsOpens in a new window – check if your agent is registered or find a registered agent to help you with your tax and super affairs
- Support for businesses in AustraliaOpens in a new window – information, grants, services and support from across government to help your business succeed
- State Small Business Commissioners help small businesses deal with disputes in
Lodging and paying
It's important that you lodge and pay your tax in full and on time. Tax returns, activity statements, other documents and information must be lodged or returned by their due dates. If you don't lodge on time, penalties may apply.
If you owe tax, you need to pay in full and on time to avoid general interest charges (GIC). GIC on overdue tax debt compounds daily, so if you don’t pay in full and on time, you'll pay more.
If you're worried you won't be able to lodge and pay by the due date, contact us or your tax professional before the due date to find out what support options are available.
Tools and resources
See our range of tools, resources and support services to make it easier to meet your tax and super obligations:
- ATO Small business newsroom and newsletter – visit the small business newsroom for the latest updates on tax and super. You can also subscribe to our newsletter – 'Small business news' – to receive regular updates sent straight to your inbox
- ATO CommunityOpens in a new window – get answers to your questions on our online community forum
- Employee or contractor – find out if your worker is an employee or contractor
- How to pay super – how to make super guarantee contributions for your employees
- How much super to pay – work out how much super guarantee you must pay
- Superannuation guarantee charge statement and calculator tool – work out how much super you need to pay if you haven't paid your super contributions on time
- Calculators and tools – to help you run your business and save you time
- Tax Time toolkit for small business – practical information and fact sheets to help your business throughout the year
- Income and deductions for business – income you need to declare and deductions you can claim
- Taking on an employee checklist – what to consider when you take on an employee
- ABN LookupOpens in a new window – check that businesses you deal with have an active ABN and whether they're registered for GST
- Contact us – for enquiries and options for managing your tax and super
- External review of our decision – further information on the external court or tribunal avenues for appealing our actions or decisions.
Learning resources
Check out our learning resources to help build good habits for running your business:
- Essentials to strengthen your small businessOpens in a new window – our online learning platform offers short courses to help you develop the skills and knowledge for your small business to thrive
- atoTVOpens in a new window – watch a wide range of short videos about tax and super
- PAYG withholding – find out if you need to register for PAYG withholding, what your withholding obligations are, how much tax to withhold, and more
- PAYG instalments – find out if you can voluntarily enter PAYG instalments and reduce the tax you may need to pay at the end of the year
- Super for employers – learn everything you need to know about paying super for your workers
- Cash Flow KitOpens in a new window – a coaching resource to help guide conversations with your tax or business adviser about developing sustainable cash flow strategies
- Small business showcaseOpens in a new window – resources on workplace laws and information for small business owners
- Business.gov.auOpens in a new window – the government's one-stop shop, including how to plan, start and run your business, and support for businesses impacted by natural disasters.